CapitaLand Integrated Commercial Trust - Annual Report 2021

Under the Balanced Scorecard framework, the CICT Group’s strategy and goals are translated to performance outcomes comprising both quantitative and qualitative targets in the dimensions of: Financial This includes targets relating to profitability and distributions, capital structure, as well as financial and risk management; Execution This includes targets relating to occupancy rates, operational efficiency and stakeholder engagement; Future Growth This includes targets relating to assets enhancements and capital recycling; and Sustainability This includes targets relating to talent retention, succession planning and sustainable corporate practices. These Balanced Scorecard targets are approved by the Board and cascaded down throughout the organisation, thereby creating alignment across the CICT Group. After the close of each financial year, the Board reviews the CICT Group’s achievements against the targets set in the Balanced Scorecard and determines the overall performance taking into consideration qualitative factors such as the quality of earnings, operating environment, regulatory landscape and industry trends. In determining the payout quantum for each key management personnel under the BSBP, the NRC considers the overall business performance and individual performance as well as the affordability of the payout to the Manager. C. Unit-based Components: Unit awards were granted in FY 2021 pursuant to the CapitaLand Integrated Commercial Trust Management Limited Performance Unit Plan (PUP) and CapitaLand Integrated Commercial Trust Management Limited Restricted Unit Plan (RUP) (together, the Unit Plans), approved by the Board. The Manager believes that the Unit-based components of the remuneration for key management personnel serve to align the interests of such key management personnel with that of Unitholders and CICT’s long-term growth and value. The obligation to deliver the Units is satisfied out of existing Units held by the Manager. To promote the alignment of Management’s interests with that of Unitholders in the longer term, senior members of Management are subject to Unit ownership guidelines to instil stronger identification with the longer-term performance and growth of the CICT Group. Under these guidelines, senior members of Management are required to retain a prescribed proportion of Units received under the Unit Plans worth up to at least one year of basic salary. Units vested pursuant to the Unit Plans may be clawed back in circumstances where the relevant participants were involved in financial misstatement, misconduct, fraud or malfeasance to the detriment of the CICT Group. CapitaLand Integrated Commercial Trust Management Limited Performance Unit Plan In FY 2021, the Board granted awards which are conditional on targets set for a three-year performance period. A specified number of Units will only be released to the recipients at the end of the qualifying performance period, provided that minimally the threshold target is achieved. Under the PUP, an initial number of Units (PUP baseline award) is allocated conditional on the achievement of a pre-determined target in respect of the Relative Total Unitholder Return (TUR) of the CICT Group measured by the percentile ranking of the TUR of the CICT Group relative to the constituent REITs in the FTSE ST REIT Index. The above performance measure has been selected as a key measurement of wealth creation for Unitholders. The final number of Units to be released will depend on the CICT Group's performance against the pre-determined targets over the three-year qualifying performance period. This serves to align Management’s interests with that of Unitholders in the longer term and to deter short-term risk taking. No Units will be released if the threshold target is not met at the end of the qualifying performance period. On the other hand, if superior CapitaLand Integrated Commercial Trust 186 Corporate Governance